Apple Hordes Cash Reserves; “Bold” Moves Only
Attention all those holding stock with Apple Inc., don’t expect any sort of dividend or buyback. Steve Jobs doesn’t plan on it. All the cash Apple has is staying in the bank, and that’s final. Is that a smart idea for Apple? For Jobs’ persona? Here’s the deal…
According to Bloomberg:
Apple is holding onto cash to take “big, bold” risks, Jobs said at the company’s shareholder meeting [on Feb 25th]. The company had about $25 billion in cash and short-term investments as of December 2009.
So what do “big” and “bold” risks entail? We’re not sure, but we could speculate for hours. Some of Apple’s money has been used to acquire some smaller companies, like Lala Media (like Pandora) and Quattro Wireless (mobile advertising). But during a recession, Apple has been investing in products (iPad) and employees (hired quite a bit in 2009), something that’s has been a bit unusual —to say the least.
Does that mean, although stock-holders don’t reap immediate rewards, they have some security in knowing Apple’s stock will almost inevitably climb upwards? Maybe. And – hey – even if it doesn’t jump up, there’s at least security in knowing Apple won’t be making any stupid moves (according to Jobs). At the same time, it also shows that Apple is investing in themselves, which means a potential ripple effect for a turnaround in the tech industry, where Apple already thrives and — though cliché — stands as a beacon of light of something new, innovative and strong.
To add some more proof to that theory, Apple has invested $1 billion in a brand new data center. Stationed in North Carolina, no one knows for sure what Apple plans on doing with it, but it’s heavily rumored that it’ll be for cloud-based services, especially with the knowledge of the aforementioned acquisitions. With 500,000 square feet, however, it’s anyones guess if it’ll just merely be a cloud.
Maybe something “bigger” and more “bold” looms. Frequent listeners of the podcast “MacBreak Weekly” are familiar with the meme some guests bring up that Apple should just up and buy (or build) their own wireless company, in lieu of AT&T’s criticism of shoddy service.
Okay, but what about Jobs’ persona? Superficially, it may seem that Jobs’ intentions are to simply ‘play it safe’ or just hold on to the cash for a ripe opportunity, but maybe Jobs’ vision is to do something so grand, we can’t even guess at it. Conversely, maybe Jobs doesn’t know what to do with it yet. Most of Apple’s great ideas take a while to hatch (iPad patents and prototype sketch-ups have existed since 2004/2005.)
With a “magic pad” (a touch pad for your desktop Mac?) potentially looming on the horizon, along with new iPhone camera innovations — this blogger waits with bated breath. The gun is loaded, the bullet is in the chamber, we’ll just have to wait for Apple to pull the money-trigger.